QE3, if deployed, won't be until the beginning of next year, says Richard Schlander, portfolio manager of the Pioneer Government Income Fund. He believes the Fed will more likely extend the timing of its first rate hike this week, and not go full throttle with anything like a bond-buying program. With the current Operation Twist program lasting until year-end, he says the Fed will want to see that through first, as well as wait for the outcome to the presidential election. The 10-year yield could make one more pass at 1.5% amid those uncertainties, but end the year closer to 2%, he said. The note is down 3/32 today to yield 1.675%.
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